Sunday, July 15, 2007

Brazil: A Wave of Corruption Cases

Brazil's President Luiz Inacio Lula da Silva, candidate for re-election, is prepared for a debate to be televised live rival

In Brazil, a Wave of Corruption Cases
President, Seen as Architect of Cleanup, Retains Public Support Even as His Allies Fall

By Monte Reel
Washington Post Foreign Service
Saturday, July 14, 2007; A12

BRASILIA -- The paper trail ends in an unmarked office in Brazil's federal police headquarters, where duffel bags full of confiscated files are heaped on the floor, waiting to be opened and analyzed.
The bags have been piling up in recent months, byproducts of the sensationally brazen corruption scandals that have been multiplying, one after the other. The parade of disgraced public figures under investigation seems endless -- from government ministers to top lawmakers to members of President Luiz Inacio Lula da Silva's family.
Meanwhile, Lula's reputation floats above the muck, rising with public opinion polls that indicate about two-thirds of Brazilians are happy with him. Close allies fall around him, but the president is protected by an increasingly popular belief: The contents of those duffel bags -- and all the dirty deals they have revealed -- might have remained unexamined if it weren't for Lula.
"People are not stupid -- they know corruption has always occurred in Brazil, and it's just that more of it is being uncovered now," said Jorge Hage, the government's auditor general. "For the first time in Brazilian history, we have a systematic effort to fight it."
Since Lula took office in 2003, the staffs of both the auditor general's office and the federal police -- the two agencies that have uncovered most of the scandals -- have grown by 50 percent.
Parts of the federal budgeting process have become more transparent, thanks in part to a Web site with detailed information about more than $1.5 trillion in federal contracts. Using such tools, Brazilians filed 6,214 allegations of wrongdoing last year, and the auditor's office analyzed 3,227 of them. A total of 1,224 government workers have been fired as a result of such investigations since 2003, according to the auditor general's office.
Some government critics have questioned whether the firings and shaming of public officials will make a lasting difference or simply allow different people to practice the same corruption. It's practically impossible to measure whether the increasing number of investigations is reducing the amount of corruption, but World Bank surveys show Brazilians don't think so: Most people perceive that there is more corruption in government now than there was 10 years ago, according to the bank's Governance 2007 report.
"I hear very frequently -- and it is said in a negative way about our work -- that it has been hard to find people now who want to accept a public job, especially one with budgetary responsibility," Hage said, sitting in front of a map covered with pushpins that mark each of the 1,223 municipalities his office has audited. "It has become a very high-risk job in Brazil."
The federal police have been leading the recent sting operations. Getulio Bezerra Santos, head of the federal police's organized crime unit, said his department now operates under a "capitalistic" reward system: The more corruption they uncover, the more resources they get. That creates incentives to target officials who control a lot of money, he said.
Bezerra Santos added that since Sept. 11, 2001, the amount of international pressure to fight terrorism has lessened the focus on drug-related crimes, freeing some police divisions to concentrate more on crimes against the public sector.
"Before, the police just went to the slums and kicked in doors, and now, we're taking panoramic elevators to air-conditioned offices," he said.
The high-profile scandals, each with a headline-ready nickname, have consistently dominated front pages in the past year. Examples include:

· "Operation Razor": a scam implicating the energy minister and 50 other officials in embezzlement of public works funds for fraudulent projects.

· "Bloodsuckers": dozens of lawmakers accused of overcharging for ambulances and pocketing the money.

· "Checkmate": implicated officials, including Lula's brother, of making financial deals with illegal slot machine operators.

· "The Big Monthly": a cash-for-votes scandal in the legislature that featured one official caught with thousands in cash stuffed in his underwear.

For years, analysts have tried to calculate the cost of corruption to Brazil's citizenry. A legal director for the attorney general's office in 2004 estimated that as little as one-third of government resources reached its intended targets, and another study estimated that about 10 percent of federal money destined for Brazil's municipalities disappeared due to graft.
Outside experts insist that both estimates are unofficial and imprecise, but no one argues that the price of corruption is low. A recent audit of $7 billion in postal contracts, for example, quantified corruption-related losses of at least $180 million.
With low inflation, a strengthening currency and a soaring stock market, Brazil is enjoying a period of economic prosperity -- and some say the rosy market has taken the urgency out of the search for long-term solutions. Though thousands of people have been charged with criminal corruption since the crackdown began, few have been convicted. Officials complain that one good lawyer can stretch out a corruption case for 10 to 20 years in the courts.
The experience of other countries that have professed to fight corruption provides plenty of cautionary tales for Lula's Brazil. In the past two years, neighbors including Peru, Bolivia and Ecuador have had presidents who originally promised to crack down on corruption, then left office defending themselves against accusations of wrongdoing.
But perhaps Italy's "Clean Hands" campaign of the 1990s offers the most sobering perspective for those delighting in the purge underway here.
The campaign began with a similar bang as in Brazil -- widespread corruption accusations caused the country's dominant political party of the postwar period, the Christian Democrats, to collapse in scandal. Hundreds of officials were charged with crimes, but prosecution lagged. Eventually, some prosecutors waging the anti-corruption campaigns were accused of corruption themselves, and public support of the movement was largely replaced by resigned complacency.
Already in Brazil, some unsettling resonances can be heard. In May, two federal police officials were suspended after they allegedly interfered with fraud investigations involving other officers. Last month, the head of the Senate's ethics committee resigned after being accused of stonewalling an investigation into Senate President Renan Calheiros, who is accused of funneling public funds to a child he fathered out of wedlock. The former committee chairman explained his resignation by telling the Brazilian press he was the victim of "a moral death squad."

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